legal

More scrutiny is needed by buyers in back-to-back aircraft deals.

Due diligence in private aviation has never been more important in today’s dangerous world populated with bad actors. Increasingly, fraud, cybercrime, money laundering, and terrorism compound the risks in standard (two-party) and back-to-back used aircraft purchase transactions.

Despite these concerns, some purchasers and sellers understandably feel frustrated that due diligence for them is repetitive or unnecessary. After all, they negotiate an aircraft purchase agreement to minimize their risk and memorialize their business agreement. It’s hard to disagree even as aircraft transactions become increasingly complex.

However, a myopic focus on the aircraft purchase agreement rather than broad risk management efforts may subject the deal participants to government inquiries, enforcement actions, or civil and criminal penalties. It is not hyperbole to say that deal participants should regard regulatory agencies as serious stakeholders in due diligence failures with substantial power and seemingly unlimited enforcement budgets.
 

Defining Due Diligence

Due diligence basically means doing your homework around buying or selling a private aircraft. That type of due diligence differs from diligence in selecting an aircraft management company, an FBO or MRO, or buying a company that holds a Part 135 certificate. And diligence for banks varies from other entities due to vast regulations, “know your customer” (KYC) rules, and internal policies.

Due diligence is not one-dimensional. It is a team sport that combines the efforts of deal experts for the parties. It is a dynamic process and adjusts to its purposes and findings.

Each relationship involving the parties must withstand and pass rigorous legal and practical assessments. An odd or troubling fact or finding, such as a suspicious seller, generically called a “red flag,” should lead to further questioning and an acceptable course of action in the transaction as part of the due diligence.

Read full article here

This article was written by David G. Mayer with Shackelford, Bowen, McKinley & Norton and published by AIN on November 8, 2024.

The FAA Aircraft Registry issued a notice today to the FAA Public Documents Room Permittees, copy attached. The notice confirms that in an effort to keep personally identifying information that may be in the documents confidential parties will no longer be able access Work in Progress files.

When documents are filed with the FAA they are file stamped with the date and time of filing. The documents are then quickly indexed against the equipment involved, normally within a few hours, thus providing notice to the public that a filing exists. This is important because priority of the conveyance filed under the FARs relates back to the date and time the documents are filed, not when they are recorded or show up in the FAA record for an aircraft/engine/propeller/spare part location.

Historically filed documents were moved to Work in Progress or “loose documents”, yet we could access copies of the documents from the FAA Public Documents Room. There is no way to know with certainty what documents were filed, parties involved, etc., by just looking at the FAA index.

Under the new process when parties run an index and determine documents were recently filed, they won’t be able to access the Work in Progress or “loose documents” for about 12 days +/-.  This won't affect every deal, but there are many transactions where documents may be showing up on the index, but not processed, prior to a closing. It will likely affect matters involving imports, where the notice of cancellation received by the FAA may not be available for days. Cancellation notices often contain references to filings or other parties that create clouds on title. In some instances law firms will not be able to provide clean opinions until the documents are processed and moved out of work in progress, which will likely delay closings.

The Registry has worked with the aviation industry to address similar issues in the past, and we expect they will provide solutions where possible.

Please reach out to the McAfee & Taft Aviation Group if you have questions.

This article was originally published by Scott McCreary with McAfee & Taft on October 31, 2024.

NAFA member, Aero Law Group, discusses things you should consider if you are contacted by the FAA that you may be under investigation.

If you spend enough time in the aviation industry in nearly any capacity, from being a pilot, mechanic, or flight attendant, to running an airline, management company, flight department or airport, contact with the FAA is nearly inevitable. Most of these interactions are routine, however, on occasion, members of the industry may find themselves, their employees, or their company under investigation by the FAA.

While most FAA investigations are closed with informal action, should the FAA inspector determine that an issue of non-compliance cannot be addressed with informal action, the inspector can issue a warning letter or refer the violation to the FAA’s legal division for further action. The FAA legal team can either request suspension or revocation of an airman’s, airline’s, or other aviation organization’s certificates, or levy a civil penalty.

When dealing with FAA personnel, the most important thing to remember is to be polite and truthful. FAA inspectors are experienced industry professionals just like the rest of us, and they have a job to do. However, it is still important to remember that much like speaking with police officers, statements you make to the FAA can subsequently be used against you. Except under limited circumstances, FAA personnel are required to issue airmen under investigation a “Pilot’s Bill of Rights” notification. This written notification informs airmen of the rights they have with respect to speaking with FAA investigative personnel, including the right to not speak with the inspector.  When an individual or entity is under investigation, they will be typically be issued a Letter of Investigation (“LOI”) from the FAA, although sometimes inspectors will begin an investigation by informally gathering information prior to issuing a LOI.

Read full article here

This article was originally published by Aero Law Group on September 17, 2024.

NAFA member Juan Carlos Ferrer, Partner with Holland & Knight, discusses the important differences between domestic and cross-border aviation finance transactions.

Though there are some similarities between financing an aircraft registered in the U.S. versus financing an aircraft registered abroad, in truth those similarities are vastly outweighed by the differences and complexities associated with a cross-border aircraft financing. The following is an overview of some important differences between domestic and cross-border aircraft finance transactions, as well as some practice pointers to assist in navigating the potential pitfalls of financing a non-U.S.-registered aircraft.

Cape Town Convention

Financing an aircraft registered in a country that has ratified the Cape Town Convention (CTC) can provide comfort to aircraft financiers that they will ultimately be able to timely foreclose on the aircraft should a default occur. Many countries have ratified the CTC, but a surprising number of countries have not. And even among those countries that have ratified the CTC, it is important to fully understand what elections the ratifying country has made to govern creditors' rights in relation to aircraft. Countries that have opted for Alternative A of the CTC afford far greater protections to creditors than those that opt for Alternative B or for reliance on that country's existing insolvency laws.

Owner Registry vs. Operator Registry

The U.S. Federal Aviation Administration (FAA) registry is an "owner-based" registry where the eligibility requirements for obtaining U.S. registration for an aircraft are determined based on the citizenship of the owner of the aircraft. The citizenship of the operator is irrelevant for purposes of registering an aircraft in the U.S. However, most foreign aircraft registries are "operator-based" registries that look to the citizenship of the operator – and not the owner – of an aircraft in order to determine eligibility to register an aircraft in that jurisdiction. Understanding these types of nuances and how to deal with the challenges, as well as the opportunities that they present, is key to properly structuring cross-border aircraft finance transactions.

Read full article here

This article was originally published by Holland & Knight on September 23, 2024. 

NAFA member David G. Mayer, Partner with Shackelford, McKinley & Norton LLP, discusses what it takes and who it takes to successfully complete an aircraft purchase.

No one should buy a used aircraft on the fly. But that does not mean the parties cannot, or should not, move quickly and efficiently to close a purchase. Some prospective purchasers treat buying an aircraft as if it is just like acquiring real estate, a car, or a boat. However, those purchases do not trigger similar complex and intersecting regulatory, liability, tax, risk management, financing/leasing, and technical equipment issues.

Sometimes trying to pace or schedule an aircraft purchase from any point in the deal continuum to closing seems more aspirational than practical. After more than four decades of practicing law, it seems no deal is the same; no deal is “simple;” and few purchases occur without external factors complicating decisions such as the U.S. presidential election, turbulent geopolitics, and economic conditions. How, then, does a purchaser start this buying journey, and what should the purchaser expect to happen?

Transaction Teams

First and foremost, a potential purchaser should hire an aircraft broker with aircraft market knowledge, strong business aviation industry relationships, team-oriented negotiating skills, and economic analysis capability. Some technical consultants also function well as brokers. Such brokers know and, in real-time, can apply to purchase decisions such factors as increasing aircraft inventories, constraints on pilot availability and high compensation, declining interest rates, and fluctuating prices in different aircraft makes and models.

Second—or first to help assess team members—a purchaser should select an aviation lawyer with deep aviation legal knowledge and deal experience, wide industry contacts, and a sense of urgency aligned with the client’s objectives.

Third, the lawyer and broker can and should recommend other appropriate aviation resources, including aviation insurance brokers, tax accountants, technical consultants, FAA counsel, and escrow and trust companies. These people, acting concurrently with the lawyer and broker, can help pick up the pace, facilitate a smooth closing, and enhance the quality of services to the parties.

Aviation professionals understand how to work rapidly, interactively, and responsively in tight coordination with their seller and purchaser clients while avoiding mistakes like those I previously identified (see “AINsight: 7 Avoidable Mistakes in Acquiring a Bizjet”).

Unfortunately, in my experience, some purchasers seem reluctant or decline to incur the expense for these resources, even in large aircraft purchases. They believe their inside counsel or other non-aviation lawyer alone can manage the process and aviation issues. Through no fault of those lawyers, the choice may result in significant mistakes such as operating the aircraft in violation of the Federal Aviation Regulations (FARs), incurring sales tax, structuring to limit personal liability, and reducing federal income tax benefits.

Read full article here

This article was originally published by AIN on September 13, 2024.

Leases are a popular option for aircraft operators, providing flexible access to a platform without the need for large capital investments. But what are the big questions would-be lessees should ask before signing on the dotted line? Gerrard Cowan finds out.

Lessees have different motivations for why an aircraft lease is right for them, so the questions they need to ask will vary depending on why they want to lease in the first place, says Mike Christie, Head of Sales, Americas at Global Jet Capital.

Confirming that the chosen structure will achieve your objectives is a good place to start, he adds.

Global Jet Capital is a major US-based provider of leasing (and other lending solutions) for business aircraft. These include operating leases, where the aircraft is owned by the lessor for the duration of the lease and handed over at the end of the term; finance leases, through which the lessee can take eventual ownership of the asset; and sale and leaseback arrangements, where an owner sells their platform to the lessor and then leases it back, enabling them to free up capital while retaining the use of the aircraft.

What are the Return Conditions at Lease-End?

One of the great benefits of a lease is the ability to simply return the aircraft to the lessor at the end of the lease term. It’s therefore very important to understand the return conditions and process of the lessor, says Christie.

“Do they use internal experts or outside contractors? Is the language clear on what is expected? Are there barriers that may make a return difficult or expensive?”

On top of this, you should ask about potential operational restrictions. Are there annual hour limitations, geographical restrictions or limits on chartering the aircraft? And it can also be insightful to ask the lessor about their commitment to leasing.

Read full article here

This article was originally published by AvBuyer on August 21, 2024.

An aircraft purchase and sale agreement is the central document in any aircraft transaction, setting forth the most important terms of the deal. Gerrard Cowan with AvBuyer asks industry experts to outline the major focuses in such agreements.

According to Stephen Hofer, President of Los Angeles-based Aerlex Law Group, not only does the aircraft purchase agreement set forth all essential commercial terms of the transaction, but it serves as the roadmap to guide all parties – particularly the seller, buyer, brokers and escrow company – as they navigate their way from the point of signature to the point of closing and delivery.

It is, therefore, vital to pay careful attention long before it comes to signing on the dotted line, he says. When the parties are ready to begin drafting a purchase and sale agreement, they will already have reached a meeting of the minds on the most basic points, such as what is being sold and the sale price.

Complications can arise in determining the delivery conditions, however. “In what condition, exactly, is the seller agreeing to deliver the aircraft at closing?” Hofer highlights.

“Sellers and buyers often have not focused on this issue at the time a Letter of Intent (LOI) is signed, so it’s up to the lawyers, working with their clients, the brokers, the technical representatives and sometimes the Pre-Purchase Inspection facility, to reach a clear understanding of the specifications the aircraft will satisfy at the moment the seller hands over the keys at the delivery location.”

Depending on how the purchase agreement is drafted, the precise language regarding delivery condition can sometimes cost one of the parties thousands, or even hundreds of thousands of dollars because it will help determine what constitutes a discrepancy or ‘squawk’, and who’s responsible for fixing it.

“Very careful attention needs to be paid to the contract at this stage of the drafting,” Hofer stresses. 

Aircraft Purchase Agreements Handle the Unexpected

The purchase and sale agreement is central to a transaction not just because it defines an outline of how a deal is to proceed, but because it also contemplates “just about any sort of event, nuance or occurrence that might take place – those that are expected and unexpected”, Janine K. Iannarelli, President of Par Avion Ltd, shares.

Provisions to deal with the unexpected are perhaps the most important element, she says, because there needs to be a means to deal with something like damage occurring to the aircraft in the course of the transaction.

Unexpected events could also involve financial difficulties that impact the buyer or seller and their ability to conclude the deal. Iannarelli says she has even seen deals fall apart because one of the parties has passed away.

“You have to have a means with which to unravel the transaction in a fair and equitable fashion, because you can’t just break a deal,” she highlights. Usually, a financial solution is involved: the forfeiture of the deposit (or part of the deposit), for instance, or specific damages depending on the reason for the default.

Read full article here

This article was written by Gerrard Cowan with AvBuyer, and originally published on July 22, 2024.

NAFA member, David G. Mayer, Partner at Shackelford, Bowen, McKinley & Norton, explains co-ownership structuring and sharing the use of an aircraft involving one or more co-owners without engaging in illegal charter operations (134 ½ operations). Regulatory, tax and risk management are critical – among other things. Guard against mistakes.

Owners and potential aircraft purchasers have for a while told me they want to buy or continue to own an aircraft but intend to share ownership with at least one other person. They recognize the value of freeing up capital from the aircraft purchase price, deploying the cash into their businesses or investments, decreasing ownership costs, and sharing the risk of depreciating aircraft values.

Fundamentals of Aircraft Sharing

How do the parties start their shared aircraft ownership experience? Before all else, they should agree to buy and/or share a mutually acceptable aircraft that accomplishes their respective missions. They should genuinely and confidently trust each other to honor their aircraft arrangements.

To avoid false starts or panic when a prospective buyer understands the true cost of aircraft ownership, each party should model and/or consult professionals to ensure that the economics make sense individually and collectively.

The parties should also address the other major issues entailed in sharing an aircraft. Tax planning and limitation of liability—starting with a request to form a limited liability company (LLC)—often surface first. More broadly, the parties should discuss their respective ideas for buying, owning, managing, operating, maintaining, and improving an aircraft as well as sharing costs.

From a legal standpoint, it is critical to comply with the Federal Aviation Regulations (FARs). As the parties plan risk management, they should promptly confirm that adequate insurance is available to cover their aircraft ownership and operations.

Read full article here

This article was originally published by AIN on July 12, 2024.

Charter operators will have up to three years to implement a proactive safety system.

Certain aircraft manufacturers and Part 135 on-demand charter and commuter operators will need to implement a safety management system (SMS) in the coming years, according to much-anticipated FAA final rules expanding FAR Part 5 requirements. Depending on the operation type, the rules require those affected to have an SMS implemented in one to three years. However, less restrictive provisions apply to single-pilot organizations.

According to the agency, the rules currently cover approximately 1,848 Part 135 operators, 694 air tour operators, and 65 Part 21 design or production certificate holders (15 of which are already implementing SMS under the FAA’s voluntary program). Additionally, there are 715 letters of authorization (LOA) for Part 91 holders approved to conduct air tours that are required to implement an SMS—362 of these LOA holders have only one aircraft.

“Requiring more aviation organizations to implement a proactive approach to managing safety will prevent accidents and save lives,” said FAA Administrator Mike Whitaker. He noted that the rules also require those who have an SMS to share hazard information with other aviation organizations “so they can work collaboratively to identify and address potential safety issues.”

Read full article here.

This article was written by AIN contributor Gordon Gilbert and published in AIN on April 23, 2024.

Piercing the veil isn't as difficult as many LLC owners assume.

My clients usually plan to use a limited liability company to own their aircraft, assuming the LLC will protect them from personal liability. Yet they often do not realize that an LLC is far from a bulletproof shield.

Although LLCs can provide barriers to private third-party claims against their owners, the reality is that certain claimants may cut through an LLC to reach the personal assets of the owner/members and other related parties. Perhaps more concerning, the U.S. government has regulatory and statutory authority that may extend personal liability to more individuals and entities than just owners, including their officers, directors, managers, pilots, and aircraft operators.

This personal liability exposure may come from three or more directions. First, third parties—including those who, for example, make claims for breach of contract, personal injury, or wrongful death—may try to “pierce the corporate veil” to reach into the pockets of LLC owners and others to pay for their claims.

Second, the FAA and the Department of Transportation can tag LLCs, LLC owners and managers, pilots, and others under the Federal Aviation Regulations (FARs) and federal statutes.

Third, the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury Department, acting under the new Corporate Transparency Act (CTA), has few limits in pursuing wrongdoers under the CTA.

Read full article here

This article was written by NAFA member David G. Mayer, Partner at Shackelford, Bowen, McKinley & Norton, and originally published by AIN on May 10, 2024.

Critical to understand and comply with the new law despite its challenges and invasiveness.

Since January 1, millions of small entities have been required to report sensitive personal information to the U.S. government like never before. These entities include limited liability companies (LLCs) and trusts that often hold title to aircraft for their sole, ultimate beneficial owners (UBOs).

The Corporate Transparency Act (CTA) is the disclosure law, and the Department of the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) is the chief enforcer. This law imposes potentially significant civil and criminal penalties for the failure or refusal to correctly and timely report all required information. Importantly, the CTA intersects with aviation regulations that may compound penalties.

Did the CTA Veer Off Course?

The reporting obligation was clear until March 1, when an Alabama federal district court in the case of National Small Business United v. Yellen (National) decided that the CTA was unconstitutional. The court halted the Department of the Treasury and FinCEN from enforcing the CTA against the National plaintiffs. In a press release on March 4, FinCEN stated that “the government will not currently enforce the CTA against the plaintiffs.”

Because National seems to apply only to the plaintiffs, UBOs and covered entities may decide on a “better to be safe than sorry” approach. To make that decision and avoid violations of the law, it is critical to understand the technical CTA rules and how to comply with them.

CTA Target Individuals and Entities

Unless exempt, the CTA imposes the obligation on “reporting companies” to submit to FinCEN “information about the reporting company [and] beneficial owner information” (BOI) for each “beneficial owner” of the reporting company plus information about the “company applicants.” Let’s unpack these elements that together sum up the CTA’s process and affected parties.

Read full article here

This article was originally published in AIN by David G. Mayer, AIN Contributor and Partner at Shackelford, Bowen, McKinley & Norton, LLP, on March 8, 2024.

Critical to understand and comply with the new law despite its challenges and invasiveness.

Since January 1, millions of small entities have been required to report sensitive personal information to the U.S. government like never before. These entities include limited liability companies (LLCs) and trusts that often hold title to aircraft for their sole, ultimate beneficial owners (UBOs).

The Corporate Transparency Act (CTA) is the disclosure law, and the Department of the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) is the chief enforcer. This law imposes potentially significant civil and criminal penalties for the failure or refusal to correctly and timely report all required information. Importantly, the CTA intersects with aviation regulations that may compound penalties.

Did the CTA Veer Off Course?

The reporting obligation was clear until March 1, when an Alabama federal district court in the case of National Small Business United v. Yellen (National) decided that the CTA was unconstitutional. The court halted the Department of the Treasury and FinCEN from enforcing the CTA against the National plaintiffs. In a press release on March 4, FinCEN stated that “the government will not currently enforce the CTA against the plaintiffs.”

Because National seems to apply only to the plaintiffs, UBOs and covered entities may decide on a “better to be safe than sorry” approach. To make that decision and avoid violations of the law, it is critical to understand the technical CTA rules and how to comply with them.

View rest of article here

This article was originally published by David G. Mayer, Shackelford Law, in AIN on March 8, 2024.

FOR IMMEDIATE RELEASE:   February 22, 2024 

Contact: Tracey Cheek    
tlc@NAFA.aero    
405.850.1292    

Melissa Wier 
Marketing Manager 
melissaweir@mvalaw.com   
704.331.2419  

NAFA Welcomes New Member: Moore & Van Allen, PLLC 

The National Aircraft Finance Association (NAFA) welcomes Moore & Van Allen, PLLC (MVA), a leading law firm with a dedicated aviation finance practice. MVA's team of over 400 attorneys brings extensive experience in complex aircraft financing transactions, including cross-border deals and structured financing for high-value assets. 

“NAFA members form a network of aviation finance services who diligently and competently operate with integrity and objectivity throughout the world,” said Ed Medici, NAFA President. “We’re excited to welcome Moore & Van Allen to our growing organization. Their services enhance NAFA’s available offerings, and we support their services to advance our members.” 

MVA's extensive experience in facilitating aircraft financing transactions will directly benefit NAFA members by providing access to invaluable legal expertise in navigating the intricacies of these transactions.  

About Moore & Van Allen, PLLC: 
An unwavering focus on their clients has led to steady growth as one of the largest law firms in the Southeast. Over 400 lawyers and professionals in over 90 areas of focus represent clients across the country and around the globe, including Blue-chip Fortune 500 organizations, financial services leaders, domestic and global manufacturers, retailers, individuals, and healthcare and technology companies. MVA clients benefit from a strategic, innovative approach to significant business transactions, complicated legal issues and difficult disputes. 

MVA’s value is rooted in the experience gained over seven decades. Nationally recognized, culturally inclusive and community-spirited, they understand that success for their clients comes from investing in the strength of ideas and the power of collaboration.

To learn more about Moore & Van Allen, PLLC, visit mvalaw.com  

About NAFA:   
The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences and industry insights allow member companies to provide the highest quality services the industry has to offer. To add your company to our world-class network of the best in aircraft finance, sign up at https://www.nafa.aero. 

FOR IMMEDIATE RELEASE:  February 15, 2024 

Contact: Tracey Cheek   
tlc@NAFA.aero   
405.850.1292   
  

Terry A. Shulsky
Shareholder 
terry.shulsky@bipc.com  
412.392.2091 

NAFA Welcomes New Member: Buchanan Ingersoll & Rooney PC 
 

The National Aircraft Finance Association (NAFA) is thrilled to welcome Buchanan Ingersoll & Rooney PC, a full-service national law firm providing industry-leading legal, business, and regulatory advice, to its esteemed network of aviation professionals. With 450 attorneys and government relations professionals across sixteen offices, Buchanan provides legal services in aviation finance and leasing, corporate finance, banking, bankruptcy, creditors’ rights, litigation, tax, intellectual property, and other practices whenever needed. 

“Buchanan Ingersoll & Rooney joining NAFA is a step forward in advancing our mission to improve and facilitate the financing process to support aircraft buyers,” said Ed Medici, NAFA President. We welcome them to our growing organization and enhancing opportunities for all our members.”  
 

About Buchanan Ingersoll & Rooney PC: 
Buchanan attorneys have found solutions that work for their aviation finance and leasing clients in the commercial, business, and private aviation industries for over 30 years. Buchanan enforces their client’s rights under the Uniform Commercial Code to recover and dispose of aircraft, helicopters, commercial aircraft engines and aircraft engine parts, components, tooling, equipment, and machinery used by Maintenance, Repair, and Overhaul (MRO) service providers in the aviation sector.  Buchanan can provide the same high level aviation collateral recovery and disposition services to NAFA members. 

Their depth means they can also support NAFA members by drafting and negotiating documentation with respect to aviation loans, leases, acquisitions, and sales. The result is a highly nimble, hands-on team with forward-thinking creativity and unique, problem-solving ideas to knock down barriers, drive regional competitive advantage, minimize risk and achieve results. 

To learn more about Buchanan Ingersoll & Rooney PC, visit Buchanan Ingersoll & Rooney PC (bipc.com) 
 

About NAFA:   
The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences and industry insights allow member companies to provide the highest quality services the industry has to offer. To add your company to our world-class network of the best in aircraft finance, sign up at https://www.nafa.aero. 

On Tuesday, January 16th, 2024 top lawmakers on the Senate and House tax writing committees announced a deal on a wide range of tax issues, including several business deductions facing possible phase down or sunset. Significant to the business aviation industry, the Act specifically extends 100% bonus depreciation.

The legislation, dubbed the Tax Relief for American Families and Workers Act of 2024, extends 100% bonus depreciation for eligible qualified property for qualified property placed in service after December 31, 2022, and before January 1, 2026 (January 1, 2027, for longer production period property and certain aircraft [1].) This change may directly impact 2023 filings, removing the 20% phase-down in the current law [2].

Taking bonus depreciation for a general aviation aircraft requires that the aircraft be used predominately in furtherance of the business activity, be placed in service in the tax year at issue, and that appropriate listed property books and records be maintained. Business form and type, ownership structure, and the nature of the business use may all impact bonus eligibility [3].

While passage remains uncertain, prominent Party leaders from both parties have publicly endorsed the agreement. They face a tight deadline to implement any changes to the tax code with the 2023 tax filing season beginning on Jan. 29.

Read full article here

This article was originally published by NAFA member, Suzanne Meiners-Levy, Partner, at Advocate Consulting Legal Group, PLLC, on January 18, 2024.